Special Topics

U.S. Small Businesses Lack Enthusiasm Near Yearendby Tom Moeller December 10, 2013

The National Federation of Independent Business reported that its Small
Business Optimism Index rose to 92.5 during November. That recouped,
however, just a piece of its sharp October decline to an unrevised 91.6.
The latest figure remained down sharply from the May high of 94.4.

Cautious optimism ruled the report. Just 3% expected higher real sales
in six months, nearly the least since March. The percentage of firms
expecting the economy to improve fell to -20%, its least since March.
Suggesting that labor market conditions remained tight, a much higher 23
percent of firms had positions they were not able to fill right now, the
most since before the recession. An increased 9% were planning to increase
employment but a higher 44% of firms found few or no qualified applicants
for job openings, also the most since before the recession.

A lessened 2% of firms were raising average selling prices, but an
improved 19% planned to do so in the future. A greatly increased 14%
planned to increase worker compensation, the most since April 2008.

The most important problems faced by small business were government
requirements (22%), taxes (21%), poor sales (15%), insurance cost &
availability (11%), competition from large businesses (8%), quality of
labor (8%), cost of labor (5%), inflation (4%) and financial &
interest rates (2%).

Roughly 24 million small businesses exist in the U.S. and they create
80% of all new jobs. The typical NFIB member employs 10 people and reports
gross sales of about $500,000 a year. The NFIB figures can be found in
Haver's SURVEYS database.